Papa John's International (PZZA) AI Stock Analysis

• Market Cap: $1.68B
• Dividend Yield: 3.59%
• Average Volume (3M): 1.46M
• Price to Earnings (P/E): 23.1
• Beta (1Y): 0.96
• Revenue Growth: -1.46%
• EPS Growth: 8.10%
• Country: US
• Employees: 11,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.41
• Shares Outstanding: 32,757,942
• 10 Day Avg. Volume: 1,178,160
• 30 Day Avg. Volume: 1,464,843
• PEG Ratio: 6.52
• Price to Book (P/B): -3.05
• Price to Sales (P/S): 0.64
• P/FCF Ratio: 38.41
• Enterprise Value/Market Cap: 1.52
• Enterprise Value/Revenue: 1.23
• Enterprise Value/Gross Profit: 5.06
• Enterprise Value/Ebitda: 11.87
• 1Y Price Target: $51.00
• Price Target Upside: 0.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 65 Neutral
• Price Target: $57.00 ▲(12.18% Upside)

Papa John's International shows a balanced outlook with strong technical indicators and positive earnings call sentiment. However, financial performance is hindered by declining margins and high leverage, which are significant risks. The valuation is moderate, supported by a reasonable dividend yield.

Positive Factors

International Expansion

Re-entering the Indian market with a long-term plan for 650 stores indicates strategic international growth, enhancing market presence and revenue potential.

Product Innovation

Product innovation with new menu items boosts customer interest and order size, supporting sustained revenue growth and competitive differentiation.

Technology Investments

Investing in technology infrastructure improves customer experience and operational efficiency, driving long-term growth and loyalty.

Negative Factors

High Financial Leverage

High leverage and negative equity position increase financial risk, potentially limiting strategic flexibility and impacting long-term stability.

Declining Profit Margins

Declining profit margins suggest rising costs or pricing pressures, challenging profitability and potentially affecting long-term financial health.

Higher Operating Costs

Rising operating costs pressure margins, impacting profitability and necessitating efficiency improvements to sustain long-term growth.

Papa John's International Business Overview & Revenue Model

Company Description

Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States and internationally. It operates through four segments: Domestic Company-Owned Restaurants, North America Commissaries, North America Franchising, and International Operations. The company also operates dine-in and delivery restaurants under the Papa John's trademark internationally. As of December 26, 2021, it operated 5,650 Papa John's restaurants, which included 600 company-owned and 5,050 franchised restaurants in 50 countries and territories. The company was founded in 1984 and is based in Louisville, Kentucky.

How the Company Makes Money

Papa John's generates revenue primarily through the sale of its pizza and related food products. The company operates a franchise model, where a significant portion of its revenue comes from franchise fees and royalties paid by franchisees based on their sales. Additionally, Papa John's earns income from company-owned restaurants, which contribute directly to its sales figures. The company also engages in online ordering and delivery services, which have become increasingly important revenue streams, especially with the rise of digital ordering platforms. Strategic partnerships with third-party delivery services further enhance its distribution capabilities and sales reach, effectively driving additional revenue. Seasonal promotions and limited-time offers also help boost sales during peak periods.

Papa John's International Financial Statement Overview

Summary

Papa John's International shows moderate revenue growth and operational efficiency, but faces challenges with declining profit margins and a highly leveraged balance sheet, posing potential financial risks. Cash flow generation is improving, yet the conversion of income to cash remains a concern.

Income Statement

Papa John's International shows moderate revenue growth with a TTM increase of 3.1%. However, the gross profit margin has decreased over time, from 30.8% in 2023 to 24.2% in TTM 2025, indicating rising costs or pricing pressures. The net profit margin has also slightly declined, reflecting challenges in maintaining profitability. Despite these challenges, the company maintains a stable EBIT and EBITDA margin, suggesting operational efficiency.

Balance Sheet

The balance sheet reveals significant financial leverage, with a negative equity position and a high debt-to-equity ratio of -2.24 in TTM 2025. This indicates potential financial risk. The return on equity is negative, reflecting losses on shareholder investments. The equity ratio is also negative, highlighting a reliance on debt financing, which could pose risks if interest rates rise or cash flows decline.

Cash Flow

Cash flow analysis shows a positive trend in free cash flow growth at 6.6% in TTM 2025, indicating improved cash generation. However, the operating cash flow to net income ratio is below 1, suggesting that net income is not fully translating into cash flow. The free cash flow to net income ratio is also moderate, indicating some efficiency in converting profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2019	Dec 2018	Dec 2017
Income Statement
Total Revenue	2.09B	2.06B	2.14B	1.62B	1.57B	1.78B
Gross Profit	505.20M	580.96M	657.07M	290.54M	353.64M	354.54M
EBITDA	215.29M	226.11M	212.50M	67.08M	77.07M	196.36M
Net Income	75.10M	83.49M	82.10M	4.87M	1.65M	103.71M
Balance Sheet
Total Assets	890.44M	888.95M	875.00M	730.72M	570.95M	555.55M
Cash, Cash Equivalents and Short-Term Investments	33.30M	37.95M	40.59M	27.91M	19.47M	22.34M
Total Debt	966.66M	971.13M	965.72M	525.23M	621.13M	466.56M
Total Liabilities	1.31B	1.30B	1.32B	1.05B	873.08M	661.51M
Stockholders Equity	-432.00M	-429.53M	-459.09M	-316.66M	-302.13M	-105.95M
Cash Flow
Free Cash Flow	57.88M	34.15M	116.44M	24.04M	30.77M	82.38M
Operating Cash Flow	131.52M	106.63M	193.06M	61.75M	72.80M	134.97M
Investing Cash Flow	-12.90M	-17.35M	-75.12M	-32.58M	-38.80M	-56.50M
Financing Cash Flow	-110.00M	-91.67M	-124.08M	-34.57M	-48.10M	-72.06M

Papa John's International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 50.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PZZA, the sentiment is Positive. The current price of 50.81 is above the 20-day moving average (MA) of 49.80, above the 50-day MA of 48.67, and above the 200-day MA of 43.68, indicating a bullish trend. The MACD of 1.30 indicates Positive momentum. The RSI at 52.33 is Neutral, neither overbought nor oversold. The STOCH value of 29.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PZZA.

Papa John's International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TXRH	―	$10.87B	24.95	32.28%	1.60%	14.59%	18.98%
PZZA	―	$1.68B	23.12	―	3.59%	-1.46%	8.10%
YUM	―	$38.36B	27.30	―	2.01%	11.30%	-7.82%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
WING	―	$6.05B	36.20	―	0.51%	22.74%	87.07%
WEN	―	$1.63B	8.91	99.35%	9.17%	1.31%	-1.46%
DPZ	―	$13.46B	23.29	―	1.67%	3.92%	4.98%

Papa John's International Corporate Events

Papa John’s Reports Modest Sales Growth in Q2 2025

Papa John’s International, Inc. is a leading pizza delivery company, known for its commitment to quality ingredients and innovative menu offerings, operating in the fast-food industry with approximately 6,000 restaurants worldwide.

Papa John’s Earnings Call: Growth and Challenges

Papa John’s International recently held its earnings call, revealing a generally positive sentiment with notable achievements in North America and international markets. The company showcased successful product innovations and strategic investments in technology and customer engagement, despite facing challenges such as rising operating costs and market optimization efforts in China. Overall, the positive developments slightly outweighed the negatives.